Forty-seven associations sign letter explaining why the proposal would have an immediate and devastating effect on newspapers

Arlington, Va. – Forty-seven press associations, representing daily and weekly newspapers across the country, have voiced their opposition to an advertising tax proposed by Senate Finance Committee Chairman, Sen. Max Baucus, in his paper “Discussion Draft on Cost Recovery and Accounting Language,” which was released in December. The ad tax proposal would require all advertisers to wait up to five years before they can fully deduct the cost of half of their advertising as a business expense.

As the letter explains, “We believe the proposal in the discussion draft would severely undercut the economic power of advertising to generate sales and support jobs. The proposed tax on advertising would push our economy down at a time when businesses – including newspapers and other media that rely on advertising – are beginning to move forward in a positive direction.”

Advertising currently accounts for $5.8 trillion of the $33.8 trillion in U.S. economic output and supports 21.1 million of the 136.2 million U.S. jobs, according to estimates by economic consulting firm IHS Global Insight. “The proposed tax would have an immediate and devastating impact on newspapers and other media, where advertisers underwrite much of the cost of bringing news, information and entertainment to all Americans,” reads the letter.

The associations’ letter reminds policy makers that advertising is an ordinary and necessary cost of doing business and has been treated as a deductible expense for 100 years and urges members of the Finance Committee to reconsider including the proposed tax in a tax reform package.

About NAA

NAA is a nonprofit organization representing nearly 2,000 newspapers and their multiplatform businesses in the United States and Canada. NAA members include daily newspapers, as well as nondailies, other print publications and online products. Headquartered near Washington, D.C., in Arlington, Va., the association focuses on the major issues that affect today's newspaper industry: public policy/legal matters, advertising revenue growth and audience development across the medium's broad portfolio of products and digital platforms. Information about NAA and the industry also may be found at www.naa.org.